Analyze the profitability of your real estate investment instantly.
Property Details
Financing
Annual Expenses & Reserves
Est. Monthly Cash Flow$0.00
Net Operating Income (NOI) / Mo$0.00
Cash on Cash Return0.00%
Cap Rate0.00%
Monthly Mortgage P&I$0.00
Total Monthly Expenses$0.00
Understanding Rental Property Cash Flow
Successful real estate investing relies heavily on the numbers. Our Rental Property Cash Flow Calculator helps investors determine if a specific property will generate positive income after all expenses are paid. Cash flow is the net amount of cash moving into or out of a business, and for rental properties, it is the difference between your monthly rental income and your monthly expenses.
Why Positive Cash Flow Matters
Positive cash flow ensures that the property pays for itself. It provides a buffer against vacancies and repairs, allowing you to hold the asset long-term while it appreciates in value. A property with negative cash flow is a liability that drains your personal resources.
Key Metrics Explained
Net Operating Income (NOI)
NOI is a critical metric calculated by subtracting all operating expenses from the revenue generated by the property. Note that NOI excludes mortgage payments, capital expenditures, and income taxes. It focuses purely on the property's ability to generate income independently of financing structures.
Cash on Cash Return (CoC)
This metric measures the annual return on the actual cash invested. Unlike Cap Rate, which looks at the total value of the property, CoC considers your specific financing. It is calculated as:
(Annual Pre-Tax Cash Flow / Total Cash Invested) x 100
Many investors aim for a Cash on Cash return of 8-12% or higher, depending on the market and risk profile.
Cap Rate (Capitalization Rate)
Cap Rate helps you compare the profitability of different properties regardless of how they are financed. It represents the potential return on an investment if you paid all cash. A higher cap rate generally implies a higher return but may also indicate higher risk.
How to Maximize Your Rental Returns
Reduce Vacancy: Keep tenants happy and maintain the property to minimize turnover time.
Increase Rent Strategically: make small, value-add improvements (like fresh paint or new fixtures) to justify higher rents.
Audit Expenses: Shop around for cheaper insurance or handle minor maintenance tasks yourself to lower operating costs.
Frequently Asked Questions
What is a good vacancy rate to use?
Most investors use a vacancy rate between 5% and 10%. In hot markets, 5% is standard (representing about 2-3 weeks of vacancy per year). In slower markets, use 8-10% to be conservative.
Should I include maintenance costs if the house is new?
Yes. Even new homes require upkeep. It is best practice to allocate 5-10% of the monthly rent into a maintenance reserve fund so you are prepared for future repairs like HVAC servicing or roof patches.
function validateInput(input) {
if (input.value 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
monthlyMortgage = loanAmount / totalPayments;
}
// 3. Expense Calculations
var monthlyTax = taxYearly / 12;
var monthlyIns = insYearly / 12;
var monthlyMaint = rent * (maintPercent / 100);
var monthlyVacancy = rent * (vacancyPercent / 100);
// Total Operating Expenses (excluding Mortgage) for NOI
var operatingExpenses = monthlyTax + monthlyIns + monthlyMaint + monthlyVacancy;
// Total Cash Outflow (including Mortgage)
var totalMonthlyExpenses = operatingExpenses + monthlyMortgage;
// 4. Income & Cash Flow
// Effective Gross Income (Rent – Vacancy, but standard practice usually treats vacancy as expense line item.
// We will treat vacancy as a cost deduction from Gross Potential Rent for NOI calculation)
// Simple Cash Flow Math: Rent – Total Expenses
var cashFlow = rent – totalMonthlyExpenses;
// 5. Metrics
var annualCashFlow = cashFlow * 12;
var annualNOI = (rent * 12) – (operatingExpenses * 12);
// Cap Rate = (Annual NOI / Purchase Price) * 100
var capRate = (annualNOI / price) * 100;
// Cash on Cash = (Annual Cash Flow / Total Cash Invested) * 100
// We assume Cash Invested = Down Payment. (Closing costs ignored for simplicity unless added input)
var cocReturn = 0;
if (downPaymentAmount > 0) {
cocReturn = (annualCashFlow / downPaymentAmount) * 100;
}
// 6. Display Results
document.getElementById('resultsArea').style.display = 'block';
// Helper for currency formatting
var fmtMoney = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('resCashFlow').innerText = fmtMoney.format(cashFlow);
document.getElementById('resNOI').innerText = fmtMoney.format(annualNOI / 12); // Display monthly NOI
document.getElementById('resMortgage').innerText = fmtMoney.format(monthlyMortgage);
document.getElementById('resExpenses').innerText = fmtMoney.format(totalMonthlyExpenses);
document.getElementById('resCoC').innerText = cocReturn.toFixed(2) + '%';
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + '%';
// Style changes based on profitability
var cfElement = document.getElementById('resCashFlow');
if (cashFlow >= 0) {
cfElement.style.color = '#27ae60';
} else {
cfElement.style.color = '#c0392b';
}
}